Former Boeing employee alleges fraud, wrongful termination

SEATTLE — A former Boeing Co. employee has filed a complaint against the company and his two former managers alleging they wrongfully terminated him after he pointed out what he perceived to be fraudulent practices by the company.

Joseph Scilia, an attorney who was hired as an administrative assistant for Boeing, further claims the company and the two managers – Carrie Hill and Randy Hays – violated both federal and state laws.

A Boeing spokesman said the allegations are without merit.

Scilia was hired to work in Boeing’s ethics department in 2001. In the following year, he began managing the Compliance Assessment Program which oversees the company’s compliance of ethical guidelines — a requirement Boeing must fulfill in order to be eligible to receive government contracts.

Scilia claims his eventual termination resulted from the alleged violations he discovered while monitoring the company’s compliance. In the complaint he says violations consisted of “improper and fraudulent government contract procurement practices.” He further claims Boeing was diluting its self-check system that had been established in 2003 when the company became involved in an ethics investigation and consequently suspended from eligibility to receive government contracts.

“Scilia was required, in part, to assure that Boeing complied with approximately 32 risk areas,” the complaint said. “Boeing/Hill were committing fraud with the government by making false statements to the government regarding the true health and nature of Boeing’s compliance program.”

Scilia said in 2005, he raised a red flag over new policies that he believed would result in misrepresentation of compliance, which would equate to fraud. He took his concerns to his supervisor, but his concerns were not investigated as was protocol, he said.

Boeing spokesman Chaz Bickers said Scilia’s claims are unfounded.

“Boeing has strong compliance monitoring system and effective mechanisms for reporting potential wrongdoing,” he said.

After Scilia voiced his concerns, he faced a series of retaliations which included public degradation and urgings for him to “find another position somewhere else,” according to the complaint.

Then in 2007, he said he was removed from his position when he returned from medical leave even though the leave had been approved by Boeing. He added he had not been reprimanded while on the job.

Scilia said he was ultimately given the position as an administrative assistant in the Corporate Secretary’s Office. Five months later, he was let go due to “organizational changes,” the document said. He said he filed a formal complaint with human resources, but it was never addressed.

The retaliation and discrimination on the part of Boeing and its two managers caused economic loss and emotional distress, Scilia said, and as a result, he is seeking damages.

Boeing has not filed a response in court, but Bickers said, “This suit is clearly without merit, and we will defend it accordingly.”

Scilia’s attorney, Mary Schultz, said she and Scilia, who now lives in Spokane, are fully prepared to take the case to trial. She said the complaint extends beyond Scilia and the damages he is seeking.

“A company engages in practices that are defrauding the government, to the detriment of all of us,” she said. “This is a very important claim for everyone, all of us as taxpayers.”

FOR MORE INFORMATION, CONTACT:
Lindsey M. Williams (202) 342-1903
or email at lmw@whistleblowers.org

PRESS ADVISORY
FOR IMMEDIATE RELEASE

House Hearings Set For Federal Employee Whistleblower Protections

Government Oversight and Reform Committee To Meet On

May 14, 2009 At Rayburn Office Building Room 2154

On Thursday May 14th at 10 AM, the House Committee on Oversight and Government Reform will be holding a hearing “Protecting the Public from Waste, Fraud and Abuse: H.R. 1507, the Whistleblower Protecting Enhancement Act of 2009.” Please visit the National Whistleblowers Center website: www.whistleblowers.org for updated information on the hearing.

This is a critical hearing in which whistleblower advocates will present testimony rebutting the extensive backroom lobbying of federal executive agencies bent on defeating federal employee whistleblower protections.

In March 2009, as part of the federal stimulus package, the House enacted whistleblower protections for all federal employees. Federal executive agencies, which are one of the last segments of the federal economy to escape meaningful whistleblower protections, spiked the bill in the Senate and it was struck from the final stimulus package. The whistleblower advocacy community is continuing to urge Congress to pass federal employee whistleblower protections this year.

Bunnatine Greenhouse, who circulated a strong letter calling for all Americans to push for federal employee whistleblower protections, will be one of the witnesses at the hearing. The National Whistleblowers Center is urging every American to contact their elected representatives and urge them to attend the hearings and support federal employee whistleblower protections. To sign the NWC’s petition click here.
AVAILABLE FOR INTERVIEWS

The NWC is making Halliburton whistleblower Bunnatine Greenhouse and three experienced whistleblower advocates available for interviews:
Bunnatine Greenhouse stood alone in opposing the approval of a highly improper multi-billion dollar no bid contract to Halliburton for the reconstruction of Iraq. In retaliation for her courage she was removed from her position as the highest-ranking civilian-contracting official at the Army Corps of Engineers. Ms. Greenhouse will be testifying on why whistleblower protection is essential to deter fraud and wasteful military spending. For more information on Bunnatine Greenhouse click here.

David K. Colapinto is the General Counsel of the National Whistleblowers Center and will be testifying about the need to protect national security whistleblowers. Mr. Colapinto’s clients have included Dr. Frederic Whitehurst, who blew the whistle on FBI abuses at the first World Trade Center bombing, Sibel Edmonds, the translator who the Bush Administration invoked the state secrets privilege in order to have her whistleblower case dismissed. Mr. Colapinto has represented whistleblowers since 1988 and is the co-author of Whistleblower Law: A Guide to Legal Protections for Corporate Employees. For information on David K. Colapinto click here.

Michael D. Kohn is the President of the National Whistleblowers Center. He has represented whistleblowers since 1985 in numerous high profile cases, and is currently lead counsel for Ms. Greenhouse. Mr. Kohn is the co-author of The Labor Lawyers Guide to the Rights and Responsibilities of Employee Whistleblowers and Whistleblower Law: A Guide to Legal Protections for Corporate Employees. Mr. Kohn will be at the hearing assisting Ms. Greenhouse. For more information on Michael D. Kohn click here.

Stephen M. Kohn is the Executive Director of the National Whistleblowers Center and one of the nation’s foremost experts in whistleblower law. He has written six books on whistleblowing, including the first legal treatise ever published on the subject. Since 1984, Mr. Kohn has successfully represented whistleblowers in numerous cases high profile cases, and currently represents Bassem Youssef, a unit chief in the FBI’s counterterrorism division with key management responsibilities related to the National Security Agency’s Domestic Surveillance Program. For more information on Stephen M. Kohn click here.

Thanks, flyover_27, for highlighting my case. I still can say “bad” things about the company, as long as they are the truth. I have never strayed from telling the truth, and my blog, accessible from my website, is pretty hard hitting, most recently pointing out that not only former Assistent Attorney GeneralPaul McNulty perjured himself before congress, but Boeing‘s CEO Jim McNerney did as well, knowingly (most likely) or not. I just can’t give out the details of what Boeing and their counsel ask me in their interviews. True, Boeing did ruin my life in an effort to go on the offensive agaunst one of their most “dangerous” (to their fraud) whistleblowers ever, trying to discredit me and imprison me in the process using illegally gathered “evidence” against me. Had I been convicted, corrupt Boeing management would have had one of their grandest back slapping parties ever in celebration, knowing they had imprisoned a whistleblower on their own crimes, knowing it was they who should have been imprisoned themselves for far worse crimes they committed than I was even accused of. Arrogant? Yes. But they do have a lock on the most arrogant, incompetent, and criminal management since Enron went down in flames.

Thursday, July 10, the Boeing Company had charges of computer trespass against former employee and Boeing Whistleblower, Gerald Eastman reduced and agreed that the charges will be dismissed entirely if Mr. Eastman agrees to tell Boeing about what data he took from the company’s computers.The Boeing Company has had Eastman’s computers for over a year, now, and surely has taken apart every document, including Eastman’s private information by now.Eastman is to be held to an agreement to follow a certain set of requirements by the Boeing Company with the threat of prison, as decided by a judge without a trial or jury, if Boeing deems Eastman has in any way violated the agreement until late January of 2009.-GFS

Thursday, July 10, 2008 the King County Prosecutor’s Office announced it would not retry Boeing Whistleblower, Gerald Eastman.They further said that Eastman has agreed to help Boeing recovers information that he leaked to the media and that if he does not “live up to the agreement” a judge can find him guilty of 10 misdemeanor counts of computer trespass, and he could face years in prison.

Eastman’s attorney stated that Eastman’s jury at the first trial which resulted in a mistrial, “was faced with a ‘vague statute’ that does not specifically say it is a crime for an employee to access information that an employer doesn’t want him to have.Given the facts of the case, she said, the jury’s failure to reach a verdict was not surprising and showed that the panel had paid close attention during the trial.”

The jury had asked numerous questions of the judge regarding consideration of Eastman’s whistleblower status and whistleblower laws, and was frustrated by the judge’s and King County Prosecutor’s office successful attempt to prevent any consideration of those facts in the trial proceedings.The trial resulted in a hung jury as some of the jurors refused to be pushed to a conviction considering the facts and King County’s management of the case.A mistrial was declared and the jurors told the judge and King County that the case should not be retried.-GFS

See the Seattle Times original article “Ex-Boeing worker will not face new trial for leaking files” at:

Friday, July 11, Boeing Whistleblower, Gerald Eastman, agreed to a settlement with his former employer, the Boeing Company, regarding the company’s prosecution of him regarding “leaked company documents.”Eastman has agreed he will try to get leaked company documents back from the Seattle Times, PI and any other place they were released.In return, Eastman will not face retrial, and after six months, if Boeing feels he has cooperated and not violated the terms of the agreement, the case against Eastman will be dismissed.If Boeing complains that he has violated the agreement, a judge may then find him guilty of at least 10 misdemeanor counts, each with a penalty of up to a year in jail.–GFS

See the Seattle Times original article “Whistle-blower settles case” at:

Investigators for The Boeing Co. told a jury on Wednesday how they pieced together a relationship between a Seattle Times reporter and an ex-Boeing employee, a relationship that could land the former employee in prison.

Gerald Eastman is accused of 16 counts of computer trespass. If convicted, he could serve up to nearly five years in prison.

Anthony Maus, a senior manager for Boeing’s investigations division, testified in King County Superior Court that his team examined leaks to Times aerospace reporter Dominic Gates, who wrote articles that relied on internal Boeing documents.

Maus said he has analyzed thousands of documents confiscated from Eastman’s home computer. He showed jurors more than 100 PowerPoint slides that detailed which of those documents he believes Gates used for his articles.

The Times has said that it would not confirm whether Eastman was a source.

Each of the 16 charges against Eastman refers to documents that were the basis of up to 13 Times articles, according to testimony.

For example, Maus said that a Times article on Jan. 27, 2005, headlined “Bigger 747 gets a close look,” is based on a PowerPoint presentation that belonged to then-Boeing Chief Executive Harry Stonecipher.

In another instance, The Times reported that 747 production would increase from one plane per month to 1.5 planes per month in mid-2005. That statement, according to Maus, correlates to a production schedule chart in another confidential Boeing document.

Maus also displayed Times newspaper graphics for the jury. One, which the jury analyzed, detailed a map of the globe to point out where different parts of the 787 Dreamliner were to be made.

A similar graphic appeared in internal Boeing documents found on Eastman’s home computer.

Since Eastman’s arrest in May 2006, no more articles have appeared in The Times that were attributed to top-level internal Boeing documents, Maus testified.

Eastman found the documents by looking through Boeing’s internal share drives, some of which were not password-protected, according to testimony by Maus and Del Valerio, a Boeing computer forensics expert who investigates media leaks.

Boeing’s internal network is one of the largest private networks in the world, with more than 200,000 users and 400,000 devices, Valerio said.

Users and groups within Boeing can create their own “file shares,” which are like electronic filing cabinets and folders. Some file shares are restricted to certain users — but some are open to everyone.

Over about two years, Eastman cataloged which parts of the network were restricted, and which were not. He also kept track of what types of documents could be found in the unrestricted file shares, according to testimony.

Many of the documents on Eastman’s home computer were marked confidential.

Eastman’s mother and sister attended part of Wednesday’s proceedings.

Marc Boman, a partner at the Seattle law firm Perkins Coie, has been observing the trial. Boman handles internal investigations, according to his firm’s Web site. Boeing is a Perkins Coie client.

P-I reporter Andrea James can be reached at 206-448-8124 or andreajames@seattlepi.com.

Meta

GFS

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